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According to a report by Bybit, institutions have significantly allocated their portfolios to Ethereum and Bitcoin, while retail users show a stronger preference for Bitcoin. The report highlights a shift in market sentiment since December, attributed to the anticipated Dencun upgrade and a reduction in altcoin positions, with institutions favoring Ethereum.
Despite Solana's strong performance in the third quarter of 2023, Bybit data indicates that both institutions and retail users have shown little interest in holding the token. As of January 31, SOL only represents a small percentage in institutional portfolios.
Bybit's research report states that institutions have overallocated their portfolios to Ethereum (ETH), followed closely by Bitcoin (BTC), in stark contrast to retail users who favor Bitcoin more. The report, based on a survey of traders holding assets on the exchange, reveals that institutions have increased the concentration of their portfolios in Bitcoin and Ether to 80%, with a significant rise in Ethereum investments. Meanwhile, the report notes that retail users have a lower concentration in these assets and a higher tendency towards altcoins.
Ethereum's current trading price is above $3100, experiencing a 33% increase year-to-date, outperforming Bitcoin. Factors contributing to this performance include a deflationary supply since the shift to Proof of Stake, lower levels of ETH held by exchanges, and increased staking activities.
In a recent report, analysts Gautam Chhugani and Mahika Sapra from Bernstein emphasized the growth of Ethereum's DeFi ecosystem and Layer-2 networks, along with the anticipated Dencun upgrade, as crucial catalysts for Ethereum's performance compared to the world's largest digital assets.
This market sentiment marks a change compared to Bybit's last report in December, where institutions favored Bitcoin, adopted a wait-and-see approach towards Ethereum, and, in anticipation of Bitcoin exchange-traded funds (ETFs) approval, redirected more Ethereum and altcoin investments into Bitcoin.
According to CoinDesk Indices data, Bitcoin has risen by 20% since the beginning of the year, surpassing the performance of the CoinDesk 20, which measures the largest digital assets and has risen by 12%.
Bybit also observes that despite the high returns in 2023, institutions significantly reduced positions in altcoins, particularly in volatile categories like Meme coins, Artificial Intelligence (AI), and BRC-20 tokens. Instead, institutions are focusing more on stable asset tokens like Layer-1 and decentralized finance (DeFi) protocols.
AI tokens appear to be correlated with the performance of chip design firm Nvidia, as the GPU giant is practically synonymous with AI development. The recent surge in profits reported by the company has driven up AI tokens, with many major tokens in this category, such as AGIX, experiencing double-digit increases last week.
Although Solana (SOL) demonstrated strong performance in the third quarter of last year, rebounding and erasing many losses from the cryptocurrency winter, Bybit's data indicates that both institutions and retail users are not interested in holding a token that was once in a leading position |
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Post time 4-3-2024 12:45:09